PCMA: Ohio's Medicaid Program Could Save $135 Million
WASHINGTON, Jan. 31, 2011 /PRNewswire-USNewswire/ -- Ohio's Medicaid program could cost taxpayers an additional $1.6 billion next year, a 49 percent jump in the state's share of costs for the health care program covering more than 2 million poor and disabled Ohioans, according to new information released by the Governor's Office of Health Transformation. This new information comes on the heels of a recent report issued by the Pharmaceutical Care Management Association (PCMA) that found the state of Ohio's Medicaid program could save $135 million over the next decade by managing pharmacy benefits more like Medicare and commercial-sector employer plans.
"The easiest way for the state of Ohio to reduce costs in Medicaid without cutting benefits is to stop overpaying pharmacies and start using cutting edge marketplace tools to negotiate lower rates and increase the use of generics," said PCMA President and CEO Mark Merritt. "By operating more like Medicare and commercial market plans, the Ohio Medicaid program could reduce pharmacy costs, increase the use of generics, and save $135 million over ten years without cutting benefits."
Recent polling finds that voters want to reduce Medicaid spending by more efficient pharmacy management rather than cutting benefits for patients or payments to doctors and hospitals. Voters also want Medicaid to stop paying higher pharmacy costs than other programs while also using fewer generics.
Most states use a fee-for-service approach in which public officials arbitrarily determine how much pharmacies are paid. As a result, Medicaid often pays pharmacies higher dispensing fees and ingredient cost reimbursements. On the other hand, Medicare and commercial plans allow pharmacy payments to be privately negotiated between plans and phar